Unofficial Copy As of 01/01/1903 Reg. Sess. 03 Rs Sb 70/Ga

UNOFFICIAL COPY AS OF 01/01/1903 REG. SESS.03 RS SB 70/GA

AN ACT relating to government contracts.

Be it enacted by the General Assembly of the Commonwealth of Kentucky:

Page 1 of 16

SB007010.100-130GA

UNOFFICIAL COPY AS OF 01/01/1903 REG. SESS.03 RS SB 70/GA

SECTION 1. A NEW SECTION OF KRS 45A.690 TO 45A.725 IS CREATED TO READ AS FOLLOWS:

(1)It is the finding of the General Assembly that every contracting body entering into a contract with an individual, firm, partnership, or corporation for professional services, and every contracting body entering into an agreement with any other government agency for the exchange of resources or responsibilities, utilizes funds appropriated by the General Assembly.

(2)It is the finding of the General Assembly that, unless a governmental emergency exists or unless submitted for information purposes, effective oversight of personal service contracts, memoranda of agreement, and amendments thereto is accomplished upon review by the Government Contract Review Committee if conducted prior to any payment or the transfer of funds, resources, or responsibilities by a contracting body.

(3)It is the finding of the General Assembly that enforcement of provisions of the Kentucky Revised Statutes requesting a contracting body to provide information to the Government Contract Review Committee, to participate in discussions relative to any contract, agreement, and amendments thereto, or to provide adequate assurance that funds appropriated by the General Assembly are utilized in an efficient manner, are an appropriate exercise of legislative authority and are necessary in the discharge of legislative duties.

SECTION 2. A NEW SECTION OF KRS 45A.690 TO 45A.725 IS CREATED TO READ AS FOLLOWS:

(1)Memoranda of agreement between contracting bodies and state universities or colleges shall be exempt from routine review by the committee, but shall be filed with the committee not more than thirty (30) days after their effective date for informational purposes.

(2)The committee shall examine all memoranda of agreement between contracting bodies and state universities or colleges submitted more than thirty (30) days after the effective date.

(3)The committee may periodically examine memoranda of agreement between contracting bodies and state universities or colleges, and may request agency participation in discussions relative to their agreements or payments.

SECTION 3. A NEW SECTION OF KRS 45A.690 TO 45A.725 IS CREATED TO READ AS FOLLOWS:

(1)Except as provided in subsection (5) of this section, no contracting body shall begin work on a memorandum of agreement until the agreement is filed with the committee.

(2)Each memorandum of agreement shall be filed with the committee prior to the effective date and shall be accompanied by proof of necessity, which may be submitted electronically or in writing. Unless exempted under the provisions of Section 6 of this Act, all active memoranda of agreement shall be filed with the committee.

(3)The committee shall maintain a record or have readily accessible records of the date on which each memorandum of agreement was received and shall maintain or have access to electronic or paper copies of each memorandum of agreement. Except for records exempt from inspection under KRS 61.870 to 61.884, all memoranda of agreement shall be made available for public inspection. Records required to be maintained by the committee shall be held for not less than two (2) years.

(4)Payment on memoranda of agreement submitted to the committee for approval shall not be made before completion of the review process by the committee and shall not be authorized for services rendered after committee disapproval, unless the decision of the committee is overridden by the secretary of the Finance and Administration Cabinet and the head of the contracting body. All memoranda of agreement shall contain a provision that stipulates that payments on memoranda of agreement shall not be authorized for services rendered after committee disapproval, unless the decision of the committee is overridden by the secretary of the Finance and Administration Cabinet and the head of the contracting body.

(5)In the event of a governmental emergency as defined under KRS 45A.690, work may begin prior to filing the memoranda of agreement with the committee, if the secretary of the Finance and Administration Cabinet and the head of the contracting body declare an emergency by a determination that the time involved in the normal review process would be detrimental to the Commonwealth's ability to act or procure the services, and the normal process will not accommodate the governmental emergency. Upon disapproval of or objection to the rationale for the governmental emergency by the committee, the agreement shall be suspended and the Governor shall determine whether it shall proceed in an expedited manner or be considered in the normal process.

(6)If a governmental emergency as defined under KRS 45A.690 exists and work is authorized to begin on a memorandum of agreement immediately, a request for emergency prepayment may be made by submitting to the committee a detailed description setting forth the need for emergency prepayment. Payment shall not be made until a written request, with explanation of the reasons for emergency prepayment is forwarded to the committee and approved by the chairperson.

SECTION 4. A NEW SECTION OF KRS 45A.690 TO 45A.725 IS CREATED TO READ AS FOLLOWS:

The committee may require that testimony be given under oath, which may be administered by the chairman or by any other person authorized by law to administer oaths. The committee may require that an official court reporter or other competent person under oath record the testimony. The transcript, when written, certified, and approved by the recorder and transcriber as being the direct transcript of the testimony, shall be prima facie evidence of a correct statement of the testimony. The recorder and transcriber's signature shall be affixed to the transcript and duly acknowledged before a notary public.

SECTION 5. A NEW SECTION OF KRS 45A.690 TO 45A.725 IS CREATED TO READ AS FOLLOWS:

(1)Notwithstanding any other provision of law to the contrary, contracting bodies may enter into multiyear contracts, memoranda of agreement, memoranda of understanding, grant agreements, or any other similar arrangements that exceed the biennium in which they are made, if the project is funded solely by federal grant money. The provisions of this section shall not apply to a state-administered retirement system.

(2)All multiyear arrangements entered into pursuant to subsection (1) of this section shall contain a provision stating that the contract or agreement funding may be discontinued by the General Assembly in a subsequent budget.

Section 6. KRS 45A.690 is amended to read as follows:

(1)As used in KRS 45A.690 to 45A.725:

(a)"Committee" means the Government Contract Review Committee of the Legislative Research Commission;

(b)"Contracting body" means any[each] state board, bureau, commission, cabinet, government corporation, department, division, authority, university, college, officer, or other entity, except the Legislature, authorized by law to contract for personal services;

(c)"Governmental emergency" means an unforeseen event or set of circumstances that may result from[creates] an emergency condition as defined in KRS 45A.095[determined by the committee by promulgation of an administrative regulation];

(d)"Memorandum of agreement" means any memorandum of agreement, memorandum of understanding, grant agreement, price contract for personal services, letter of understanding, program administration contract, interlocal agreement to which the Commonwealth is a party, privatization contract, or similar device relating to services between a contracting body[state agency] and any other governmental body or political subdivision of the Commonwealth that involves an exchange of resources or responsibilities to carry out a governmental function. It includes agreements by regional cooperative organizations formed by local boards of education or other public educational institutions for the purpose of providing professional educational services to the participating organizations and agreements relating to the highly skilled education assistance to schools and districts program[with Kentucky Distinguished Educators] pursuant to KRS 158.782. This definition does not apply to:

1.Agreements between the Transportation Cabinet and any political subdivision of the Commonwealth for road and road-related projects;

2.Agreements between the Auditor of Public Accounts and any other governmental agency or political subdivision of the Commonwealth for auditing services;

3.Agreements between state agencies specifically required under federal or state law, or exempted from the provisions of this chapter[as required] by federal or state law;

4.Agreements between[ state agencies and state universities or colleges and agreements between] state universities or colleges and employers of students in the Commonwealth work-study program sponsored by the Kentucky Higher Education Assistance Authority;

5.Agreements relating to[involving] child support collections and enforcement;

6.Agreements with public utilities, providers of direct Medicaid health care to individuals except for any health maintenance organization or other entity primarily responsible for administration of any program or system of Medicaid managed health care services established by law or by agreement with the Cabinet for Health Services, and transit authorities;

7.[Nonfinancial agreements;

8.]Any obligation or payment for reimbursement of the cost of corrective action made pursuant to KRS 224.60-140;

8.[9.]Exchanges of confidential personal information between agencies;

9.[10.]Agreements between state agencies and rural concentrated employment programs; or

10.[11.]Any other agreement that the committee deems inappropriate for consideration;

(e)"Multicontract" means a group of personal service contracts between a contracting body and individual vendors providing the same or substantially similar services to the contracting body that, for purposes of the committee, are treated as one (1) contract;[ and]

(f)"Personal service contract" means an agreement whereby an individual, firm, partnership, or corporation is to perform certain services requiring professional skill or professional judgment for a specified period of time at a price agreed upon.[ It includes all price contracts for personal services between a governmental body or political subdivision of the commonwealth and any other entity in any amount.] This definition does not apply to:

1.Agreements between a contracting body[the Department of Parks] and a performing artist or artists for less than five thousand dollars ($5,000) per fiscal year per artist or artists;

2.Agreements with public utilities, foster care parents, providers of direct Medicaid health care to individuals except for any health maintenance organization or other entity primarily responsible for administration of any program or system of Medicaid managed health care services established by law or by agreement with the Cabinet for Health Services, individuals performing homemaker services, and transit authorities;

3.Agreements between state universities or colleges and employers of students in the Commonwealth work study program sponsored by the Kentucky Higher Education Assistance Authority;

4.Agreements between a state agency and rural concentrated employment programs;

5.Agreements between the State Fair Board and judges, officials, and entertainers contracted for events promoted by the State Fair Board; or

6.Any other contract that the committee deems inappropriate for consideration; and

(g)"Proof of necessity" means documentation of:

1.The need for the service;

2.The unavailability of state personnel or the nonfeasibility of utilizing state personnel to perform the service;

3.The total projected cost and source of funding;

4.The total projected duration;

5.The payment information, in detail;

6.The names and addresses of all providers considered for personal service contracts and the basis for selecting the vendor; and

7.Such other information as the committee deems appropriate.

(2)Compliance with the provisions of KRS 45A.690 to 45A.725 does not dispense with the requirements of any other law necessary to make the personal service contract or memorandum of agreement valid.

Section 7. KRS 45A.695 is amended to read as follows:

(1)Except as provided in subsection (8) of this section, no one shall begin work on a personal service contract entered into by any contracting body, until[ notification of] the personal service contract is filed with the committee. Each personal service contract shall have a cancellation clause not to exceed thirty (30) days notice to the contractee.

(2)Each personal service contract[ and memorandum of agreement] shall be filed with the committee prior to the effective date and shall be accompanied by[ a completed] proof of necessity, which may be[ form as established by the committee by promulgation of an administrative regulation, or equivalent information if] submitted electronically or in writing. Unless exempted under the provisions of Section 6 of this Act all active personal services contracts shall be filed with the committee.[The proof of necessity form shall document:

(a)The need for the service;

(b)The unavailability of state personnel or the nonfeasibility of utilizing state personnel to perform the service;

(c)The total projected cost of the contract or agreement and source of funding;

(d)The total projected duration of the contract;

(e)Payment information, in detail;

(f)In the case of memoranda of agreement or similar device, the reason for exchanging resources or responsibilities; and

(g)Such other information as the committee deems appropriate.]

(3)Adequate notice of the need for a personal service contract in aggregate amounts of over ten thousand dollars ($10,000) shall be given by the contracting body through a request for proposals which shall:[.]

(a)[The request for proposals shall ]Describe the services required;[,]

(b)List the type of information and data required of each offeror;[,] and

(c)State the relative importance of particular qualifications.

(4)The head of the contracting body or his designee may conduct discussions with any offeror who has submitted a proposal to determine the offeror's qualifications for further consideration. Discussions shall not disclose any information derived from proposals submitted by other offerors.

(5)Award shall be made to the offeror determined by the head of the contracting body, or his designee, to be the best qualified of all offerors based on the evaluation factors set forth in the request for proposals and the negotiation of fair and reasonable compensation. If compensation cannot be agreed upon with the best qualified offeror and if proposals were submitted by one (1) or more other offerors determined to be qualified, negotiations may be conducted with the other offeror or offerors in the order of their respective qualification ranking. In this case, the contract may be awarded to the next best ranked offeror for a fair and reasonable compensation. All determinations of the qualification rankings of offerors by the head of the contracting body or a designee[ of the officer] based on evaluation factors set forth in the request for proposals shall be made in writing. Written documentation shall be maintained concerning the final results of negotiation with each vendor and reasoning as to why each vendor was chosen.

(6)The committee shall maintain a record or have readily accessible records of the date on which each personal service contract[ and memorandum of agreement] was received and shall maintain or have access to electronic or paper files on each[all] personal service contract[contracts and memoranda of agreement]. Except for records exempt from inspection under KRS 61.870 to 61.884, all personal service contracts[ and memoranda of agreement] shall be made available for public inspection. Records required to be maintained by the committee shall be held for not less than two (2) years.

(7)Payment on personal service contracts[ and memoranda of agreement] submitted to the committee for approval shall not be made before completion of the review process by the committee and shall not be authorized for services rendered after committee disapproval, unless the decision of the committee is overridden by the secretary of the Finance and Administration Cabinet and the head of the contracting body[or agency head, if the agency has been granted delegation authority by the secretary of the Finance and Administration Cabinet]. All personal service contracts[ and memoranda of agreement] shall contain a provision that stipulates that payments on personal service contracts[ and memoranda of agreement] shall not be authorized for services rendered after committee disapproval, unless the decision of the committee is overridden by the secretary of the Finance and Administration Cabinet and the head of the contracting body[or agency head, if the agency has been granted delegation authority].

(8)In the event of a governmental emergency as defined under KRS 45A.690, work may begin prior to filing[ notification of] the personal service contract with the committee, if the secretary of the Finance and Administration Cabinet and the head of the contracting body declare an emergency by a determination[or his designee determines] that the time involved in the normal review process would be detrimental to the Commonwealth's ability to act or procure the services, and the normal process will not accommodate the governmental emergency. Upon disapproval of or objection to the rationale for the governmental emergency by the committee, the contract shall be suspended and the Governor shall determine whether it shall proceed in an expedited manner or be considered in the normal process.[Payment shall not be made until written notification and explanation of the reasons for this action are forwarded to the committee.]

(9)If a governmental emergency[ exists] as defined under KRS 45A.690 exists and work is authorized to begin on a personal service contract[contact] immediately, a request for emergency prepayment may be made by submitting to the committee a detailed description setting forth the need for emergency prepayment. Payment shall not be made until a written request, with explanation of the reasons for emergency prepayments, is forwarded to the committee and approved by the chairperson[copy of a statement, approved by the secretary of the Finance and Administration Cabinet or his designee, setting forth in detail the nature of the emergency shall be filed with the committee, along with a copy of the personal service contract].

Section 8. KRS 45A.700 is amended to read as follows:

(1)Personal service contracts in aggregate amounts of ten thousand dollars ($10,000) or less during any one (1) fiscal year shall be exempt from routine review by the committee, but[ and] shall be filed with the committee not more than thirty (30) days after their effective date for informational purposes[ only]. The committee shall examine all personal service contracts in aggregate amounts of ten thousand dollars ($10,000) or less submitted more than thirty (30) days after the effective date. The committee may periodically examine the informational copies of personal service contracts in aggregate amounts of ten thousand dollars ($10,000) or less and may request agency participation in discussions relative to their contracts and[or] payments.[ The provisions of this subsection shall not apply to price contracts for personal services.]